Company admits it uses the wrong formula to compute iPhone signal strength

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A man holds his iPhone 4 in front of a mobile phone store in Tokyo on June 24, 2010. Hundreds of Apple fans braved sweltering humidity to form giant queues in an upscale Tokyo district in a race to be among the first in the world to get their hands on the latest iPhone. AFP PHOTO/Toru YAMANAKA (Photo credit should read TORU YAMANAKA/AFP/Getty Images)

Updated at 11:44 AM EDT on Friday, Jul 2, 2010

For two weeks, Apple dismissed rumors of a faulty antenna in the new iPhone 4 as nothing more than scuttlebutt. Any phone has these problems, Apple officials said. Buy a case to fix it.

Friday, Apple came clean: The antenna works just fine. But the software that displays signal strenth doesn't. The company has been using a faulty formula to determine signal strength in its phones for years.

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"Upon investigation, we were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong," Apple said in a letter from two executives posted on its website Friday morning.

The letter went on to explain that there are no problems with the iPhone's antenna -- the only problem is with software that calculates how many bars should be showing. And the software hasn't worked properly since the original iPhone was released three years ago.

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Now, the frustrating dropped calls that every iPhone user has experienced makes so much sense.

We've all been there: We need to make a call and see four bars on our phone, yet when we try to connect, it inexplicably doesn't go through. Or drops after 30 seconds. The problem: We never actually had good reception.

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So that iPhone 4 bug where reception diminshes if you hold the phone a certain way? Turns out you weren't hurting reception at all -- the phone was just showing the proper reception. Finally.

Apple promises a fix "in the next few weeks." In the meantime, the message is clear: You can use your phone, just don't trust those little bars.

For a company famous for its perfectionist attitude, this is a shocking slip.